Seven Network seeks Cost Orders of $152,156 against Kangaroo Court blogger Shane Dowling

Seven Network (Operations) Ltd v Dowling (No 3) [2021] NSWSC 1371 (27 October 2021)

A contempt motion was filed against the defendant.  The contemnor was ordered to pay indemnity costs. As such, the plaintiffs seek a specified gross sum.  The Court, in determining the costs order to make, considered the defendant's inability to pay costs. 

Facts:

On 21 June 2021, her Honour found the defendant guilty of contempt.  On 13 August 2021, her Honour ordered that the defendant pay the plaintiffs’ costs of the contempt motion on an indemnity basis, payable forthwith, and gave directions in respect of any application for gross sum costs.  The plaintiffs seek a specified gross sum instead of assessed costs.  

The plaintiffs submitted that this case clearly falls within the description in Harrison v Schipp where the Court stated that a specified gross costs order may be made when assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment.  The Court has already noted the prospect that Mr Dowling cannot or will not pay any costs. 

Mr Dowling's conduct in disputing that he was the publisher of the offending material and, preceding that by conducting his acts of publication anonymously, very substantially contributed to the costs of the contempt motion.  The plaintiffs sought costs in respect of solicitor and counsels’ fees for preparation and settling evidence relied upon on the motion and appearing at substantive hearings, being before me on 27 September 2018, before Kunc J on 2 and 3 December 2019, the hearing of the contempt motion on 1 and 2 February 2021 and the hearing on 13 August 2021.  In addition, the plaintiffs sought disbursements for the fees of the independent solicitor, Ms Sylvia Fernandez, fees charged by expert witness Dr Bradley Schatz; together with court fees and filing fees.  In total, the plaintiffs seek a lump sum costs order in the amount of $152,156.86, comprising solicitors’ fees of $55,911.00, counsel’s fees of $113,152.18 (noting that, by and large, senior counsel appeared without a junior) and the disbursements identified. Legal fees have been further discounted by 10%..

Issue:

Whether or not it is appropriate to make a lump sum costs order. 

Applicable law:

Civil Procedure Act 2005 (NSW) s 98 - provides that at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: xxx (c) a specified gross sum instead of assessed costs.

Legal Profession Uniform Law (NSW) - provides that a specified gross costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures found herein. 

Uniform Civil Procedure Rules 2005 (NSW) r 42.5 - provides that where costs have been ordered on an indemnity basis, “all costs (other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount) are to be allowed”.

Baychek v Baychek [2010] NSWSC 987 - provided that the gross sum bear a reasonable relationship to the actual costs of the party making the application, and to the costs that that party might reasonably be expected to recover on assessment.

Bitek Pty Ltd v iConnect Pty Ltd [2012] FCA 506; (2012) 290 ALR 288 - where  in order to avoid a further waste of time and money that the applicant may not be able to recoup readily from the respondents or at all, the Court considered it appropriate to make a lump sum costs order.

Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 - where it is a relevant consideration whether “the financial capacity of the party liable to pay costs is such that the additional cost of taxation will impose a significant burden on the party in whose favour costs are ordered without real prospects of recovering those costs”.

Hamod v State of New South Wales [2011] NSWCA 375 - where it was held that the power to make a specified gross sum costs order should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.

Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 - noted that the power conferred by [section 98(4)] is not confined, and may be exercised whenever the circumstances warrant its exercise.  It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment.

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 - where Einstein J summarised the principles which inform the exercise of the discretion to specify a gross sum.

Kostov v Zhang (No 2) [2016] NSWCA 279 - where  a “broad brush” approach is appropriate since to require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order.

Analysis:

Mr Dowling either cannot or will not pay the plaintiffs’ costs. This favours the award of a lump sum costs order, thereby reducing wasted costs on any unnecessary costs process.  The defendant’s conduct substantially contributed to the costs incurred in prosecuting his contempt.  Taking an approach other than specifying a gross sum would put the plaintiffs to the further time and expense involved in an assessment of their legal costs in circumstances where it is readily apparent that Mr Dowling is unlikely to participate in a costs assessment in any meaningful or relevant way, if his written submissions on this application are anything to go by.

Conclusion:

The Court is  satisfied it is appropriate to make a specified gross sum order in the amount claimed by the plaintiffs.  Pursuant to section 98(4) of the Civil Procedure Act 2005 (NSW), the Court orders the defendant to pay the plaintiffs’ costs of the contempt motion filed on 21 July 2017 in the gross sum of $152,156.86.